Consumer Spending Below Expectations, PP Fluctuates Weakly in Mid-September in China

September 17, News

According to the commodity market analysis system, in mid-September, the PP market in China experienced fluctuating conditions, with more decreases than increases in the prices of various grades. As of September 17th, the mainstream offer price for drawing grade by Chinese producers and traders was around 7,113.33 CNY/ton, a change rate of -0.93% from early September.

Price Trend

Regarding raw materials:

At the beginning of September, geopolitical tensions in Eastern Europe and the Middle East remained subdued, easing market concerns about crude oil supply. Meanwhile, OPEC+ has continued its strategy of increasing production, while seasonal demand has simultaneously begun to wane, causing international oil prices to fluctuate at low levels. Earlier, propylene prices had risen, boosted by news of a maintenance shutdown at Haiwei; however, with ample supply available on the market, upward price momentum has faced significant resistance. Additionally, limited improvement in downstream demand has led to a partial reversal of recent price hikes. Overall, the current market conditions for PP feedstock materials are showing weak cost support.

Supply Side:

In mid-September, the operating rates of PP enterprises in China were adjusted downward from high levels. On the 11th, Yulong Petrochemical's Line 1 and part of Shaoxing Sanyuan underwent plant maintenance. As of the time of writing, the overall industry load level in China has dropped from 80% in early September to around 75%, with the weekly total production falling below 790,000 tons. However, recently, some production lines of Zhongjing Petrochemical and Dongming Petrochemical have completed their restarts, and the first line of the 900,000-ton new production line (450,000 tons) at Ningbo Daxie Phase II has been commissioned, clearly indicating a trend of ample market supply, which severely limits the support from the supply side. Currently, the supply in the market remains abundant, with inventory levels holding firm at a high of 830,000 tons. Overall, the supply side of PP is not providing strong support for spot prices.

On the demand side:

September falls within the traditional peak season for polypropylene, and demand has improved to some extent across sectors such as plastic packaging and agriculture. New orders in the market are gradually increasing, signaling a tentative recovery in market momentum. However, the positive impact of this improved trading atmosphere is being offset by several significant headwinds. Moreover, downstream companies are still experiencing a generally slow pace of capacity restoration, which has delayed the full-scale consumption pickup typical of the PP peak season—and is also weakening support for demand.

Future Market Forecast

In mid-September, the PP market prices in China were mainly fluctuating. From a fundamental perspective, the upstream raw material prices were weak, providing poor overall support for PP. The industry load was slightly adjusted at a high level, with expectations of loose supply in the future. Although consumption has improved, the market is still being dragged down by the cost and supply sides. The current seasonal speculative buying atmosphere is being suppressed, and it is expected that PP will continue to operate in a stalemate in the short term.